Warsh Signals Rate Hikes May be Needed to Combat Elevated Inflation

At the Federal Reserve's annual conference in Jackson Hole, Wyoming, Fed Chair Kevin Warsh signaled that interest rate hikes may be necessary to combat elevated inflation. Speaking on Friday, Warsh acknowledged that recent US data show inflation has cooled slightly, but underlying trends have not improved enough.

'We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,' Warsh said. 'Otherwise, we have work to do.'

The Fed chair emphasized that interest rates are currently not high enough to bring down inflation, which remains above the central bank's 2% target. He noted that in the past year, 54% of goods and services tracked by the government have seen price increases of 3% or higher.